TJX stock slumps, but analysts are optimistic about the long-term

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Among the challenges off-price retailer TJX Cos. faces in the near-term due to COVID-19 are inventory supply constraints, supply chain troubles and delays at distribution centers. But Wells Fargo analysts say the “squishy” near-term will give way “over the long-term as a flood of inventory enters the off-price marketplace in the wake of 2020, ultimately pushing margins to all-time highs,” analysts wrote. Wells Fargo rates TJX stock overweight with a $70 price target. “We think investors are under-estimating TJX’s ability to win in retail’s new paradigm,” wrote Camilla Yanushevsky at CFRA. “TJX’s opportunistic purchasing model gives unprecedented leverage with suppliers, which are over-inventoried and looking to quickly off-load. We see bargaining power further solidified as manufacturers’ choice of wholesalers dwindles with industry (25,000 closures we see in 2020).” CFRA maintains its strong buy stock rating and $65 price target. And MKM Partners says the “long-term story has not changed.” Analysts there rate TJX stock buy with a $64 price target, down from $68. “This customer is fiercely loyal, and those that have returned to stores were said to have resumed pre-pandemic shopping patterns,” MKM said. TJX stock has slumped 9.2% for the week to date, and has fallen 14% for the year so far. The S&P 500 index is up 4.6% for 2020 to date. See: TJ Maxx parent swings to loss, beats sales expectations
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